Pittsburgh's URA to forgive $2.9M in small-business loans

Pittsburgh’s Urban Redevelopment Authority said this week it would forgive more than $2.9 million in small business loans given through its Emergency Loan Fund program, in a move meant to help small businesses survive the covid-19 pandemic.

As covid-19 restrictions forced many small businesses to close their doors or alter their services, the URA created the emergency loan program to distribute loans of up to $15,000 with a 0% interest rate. The loans were meant to help businesses cover fixed costs — like rent, insurance and payroll — when they weren’t making money during the pandemic shutdowns.

All repayments were deferred for six months, giving businesses time to begin generating revenue again.

From March to August 2020, the URA granted 217 emergency loans, 69% of which benefited businesses making less than $500,000 in annual revenues. Of the grant recipients, 66% were women- or minority-owned businesses.

The program distributed just more than $2.9 million in total.

In July, the URA stopped soliciting payments from emergency loan borrowers. In August, the authority notified those borrowers that their outstanding loan balances were forgiven.

The URA used part of the $3.5 million in American Rescue Plan funding allocated by Mayor Bill Peduto to pay off the loans.

“Small businesses are the backbones of our neighborhood main streets,” Peduto said. “By forgiving loans, the city and URA are taking another step to aid our economic recovery and invest in the future of Pittsburgh small business.”

The remaining portion of that $3.5 million in federal pandemic relief money — nearly $600,000 — will be used to reduce outstanding balances for Recovery Loan borrowers. The URA gave nearly $3.9 million in recovery loans to 67 small businesses between June and November 2020. Of those borrowers, 67% were women- or minority-owned businesses.

Nicolette Garcia-Pawlowski, president of Los Sabrosos Dance Co., a dance school on Penn Avenue in Garfield, said she read the letter informing her the loan was forgiven “with tears of joy.”

“This is the best news I’ve received in a very long time,” said Adele Morelli, owner of Boutique La Passarelle, a European fashion boutique on Wood Street in Downtown.